On inflation, it added that “upside risks” have increased, with inflation projected to average 5.7 per cent in the second half of FY27 and potentially reach 5.9 per cent in the third quarter.
Systematix argued that the latest projections point to growing stagflationary risks for the economy.
“The RBI appears to be capitulating to stagflationary risks — higher inflation (potentially approaching or exceeding the upper tolerance band) alongside moderating growth,” the report said.
The brokerage further noted that India’s foreign currency assets have declined amid interventions to support the rupee, adding that the currency had approached “critical levels near 100/USD.”
While acknowledging that the RBI’s measures could provide near-term relief, the report cautioned that they do not address deeper structural issues facing the economy.
“This package represents a short-term intervention to manage currency, liquidity, inflation, and growth amid global disturbances,” it said.
The report added that attracting foreign capital alone would not be enough to sustain long-term growth without stronger economic reforms.
“Without sustainable earnings growth and deeper structural reforms, these steps alone may not deliver lasting impact,” the report said, adding that durable growth would depend on “underlying economic fundamentals and sustained investor confidence.”
With inputs from ANI